OnDeck OnDeck
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OnDeck Review

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Rating:
Bottom Line:
Variety of rate and term options; fixed-rate payments are daily or weekly rather than monthly; good option for newer as well as more established small businesses

Full Review:
OnDeck is a well-established lending service that offers small businesses of all kinds an alternative to borrowing from a bank. The company offers short and long-term loan terms, and it focuses on the health of your business when determining whether to approve a loan.


Types of Loans Available

Business loans from OnDeck are offered in two types — short and long term. Both are unsecured loans, however the requirements are a bit different between the two. Short-term loans are offered for $5,000 to $500,000 with rates as low as 9% for every dollar borrowed. They are available for terms of three to 12 months. The requirements for these loans, as discussed below, make them ideal for projects that will give you an immediate return on your investment, such as marketing campaigns or seasonal hiring. Long-term loans are designed for funding larger projects that may take more time to pay back, such as purchasing equipment or opening new locations. These loans are offered for $50,000 to $500,000 with rates from 9.99% to 99%, and they are available for terms of 15 to 36 months.

OnDeck also offers lines of credit up to $100,000, with rates between 13.99% and 39.99% that are based on OnDeck's assessment of your business and credit. The lines of credit are paid back in fixed, weekly installments, and the line also carries a $20 per month maintenance fee. However, OnDeck will waive the fee for six months if you make an initial draw of $5,000.


Loans from OnDeck are unsecured, meaning they don't require property or real estate as collateral, but a lien will be made on the assets of your business.


Qualifying

To qualify for an OnDeck Term loan, your business must be at least 1 year and make $100,000 or more in annual revenue. Additionally, at least one owner must have a personal credit score of 500 or higher.

OnDeck Term 24 loan requirements are a bit more stringent — businesses must be at least three years old and make $100,000 or more in revenue each month. Both business and personal owner credit must be strong, and you must make frequent business checking transactions.

OnDeck can make loans to business owners in all 50 U.S. states in over 700 industries. It does have a list of industries it cannot lend to, including financial services and investments, sellers (pawn shops, flea markets, etc.), vices, vehicle and power equipment sales and more. If you are concerned whether your business qualifies or not, you should check OnDeck's website first.


Application Process

The application process for an OnDeck loan is fast and simple. No matter what type of loan you're applying for, the same application will be used. The service estimates it should take about 10 minutes to apply, and you can do so via its secure online form or over the phone. The service uses a proprietary system it calls OnDeck Score™ technology to rank the health of your business and determine whether to approve your application or not. In addition to basic information about the owner and the business, OnDeck might also require your business tax ID, credit card statements from the past three months, bank statements from the past one to three months, the social security number of the owner(s) and your driver's license information.

If approved, you can see funding in your bank account within 24 hours of applying.


Repayment and Fees

Terms with OnDeck are relatively short — ranging from three to 24 months. OnDeck takes a different approach to payments than other loan services we've reviewed. Rather than make monthly payments, daily or weekly payments will be automatically deducted from your business bank account. This is to help ensure a minimum impact on cash flow, according to the service, and help prevent the "snowball effect" of missing monthly payments.


All initial loans are charged a 2.5% origination fee, which will be taken from the total amount of your loan. If you renew your loan or take out another, the origination fee will reduce to 1.25%. Any loans after that will not be charged a fee at all, which is a nice gesture for returning customers.

If a payment is missed or incapable of completion, a $25 fee will be charged. There are no penalties for paying your loan off early, but since the payments are automatic you'll need to contact OnDeck to make arrangements to do so.


Customer Support and Trustworthiness

OnDeck has been around since 2007 and has built up a good reputation as a small business lending option. It has an A+ rating with the BBB and is accredited with the organization. Additionally, the company is backed by Google Ventures, which certainly adds to its image overall.

The service offers customer support in the form of phone, email and live chat. Its hours for phone and live chat support are Monday through Friday from 8 a.m. to 6 p.m. ET and Saturday from 9 a.m. to 5 p.m. ET. Customer service representatives are friendly and knowledgeable, although the wait times can be a little long for live chat. Every customer has access to the status of their loan online 24/7, and you can send an email any time. The website's FAQ section isn't as thorough as it could be, but it provides answers to some common questions.


Conclusion

Small businesses of all kinds can benefit from using OnDeck's lending services, especially considering the company's reputation and longevity. The focus on customer service can be felt through the lowering of the origination fee for second-time borrowers and interactions with customer support. Rates are a bit on the steep side for the Term 24 loans, but the daily and weekly payment options are an interesting approach to ensuring your loan gets paid on time and in full.

Apply for OnDeck | Compare to Other Small Business Loans

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Service Details

Minimum/Maximum Loan Amount:$5,000 - $500,000
APR:9.99% - 99%
Terms Available:3 - 36 months
Origination Fee:2.5% - 4%
Minimum Business Age Required:1 year
Minimum Annual Revenue Required:$100,000
Owner's Credit Rating:500+

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